Cash Flow Statement · Class 12 · CBSE · Commerce Accountancy

Which of the following transactions is classified as an Operating Activity for a manufacturing company?

Practice question from Cash Flow Statement (Class 12 · CBSE · Commerce Accountancy), with the correct answer and a step-by-step solution.

easy · MCQ · Q-1DC099

Which of the following transactions is classified as an Operating Activity for a manufacturing company?

  1. A.Issue of equity shares for cash
  2. B.Payment of wages to factory workersCorrect answer
  3. C.Purchase of machinery for cash
  4. D.Repayment of a long-term bank loan

Solution

Payment of wages is a routine operating expense directly related to the primary revenue-generating activity of a manufacturing company. Issue of shares and loan repayment are financing activities, while purchase of machinery is an investing activity.

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